Which of the Following Will Not Cause a Demand Curve

question 5

Multiple Choice

Which of the following will not cause a demand curve to shift position?

• A)A doubling of the good's price.
• B)A doubling of the price of a closely substitutable good.
• C)A doubling of income.
• D)A shift in preferences.
• E)A doubling of both the price of X and the price of Y.

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Definitions:

Real Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing or real yield on an investment.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and, subsequently, eroding purchasing power.

Spot Rate

The current market price at which a particular currency can be bought or sold for immediate delivery.

Relative PPP

Relative Purchasing Power Parity, a theory which states that exchange rates between currencies change to compensate for inflation rate differences among countries.